The gross domestic product of Hungary was up 3.2% in the last quarter of 2015 as compared to the same period a year earlier, Hungary’s Central Statistical Office (KSH) reported today in a first reading of data.
As compared to the previous quarter, according to seasonally and calendar effects adjusted data, GDP grew 1% in Q4 of last year. Considering the whole year, the volume of GDP rose by 2.9% compared to the preceding year.
Growth was helped by all main sectors with the exception of agriculture and the construction sector, KSH department head Zsuzsanna Boros Szőke told reporters today, Hungarian news agency MTI reported. The former contracted while the latter leveled out, she said.
Industry remained the engine for GDP growth but output growth, formerly present mainly in vehicle manufacturing and its suppliers, has now extended to almost all branches of industry, Szőke said. Activity picked up in the majority of services as well, in the fourth quarter of 2015, she added.
ING Bank chief analyst András Balatoni said the dynamic growth on the demand side is likely to have been caused by a peak in investments resulting from the acceleration of the disbursement of European Union funding for the previous seven-year period at the end of last year, MTI reported. Balatoni foresees 2.0-2.5% annual GDP growth in 2016.
Gergely Űrmössy of Erste Bank also noted that the government drew down all available EU resources by the end of 2015, MTI reported, adding that, the government used a year-end budget buffer to finance investments. He predicts a 2.2% GDP growth for 2016.
Dávid Németh of K&H Bank forecast average GDP growth of 2.2-2.3% in 2016, MTI reported.
Gergely Suppan of Takarékbank forecast 2.5% GDP growth for 2016 and said economic growth could accelerate again in 2017, partly due to faster drawdown of EU funding and partly due to the cut in the VAT rate on home construction and the expansion of home purchase subsidies. He predicted 2.8-3.0% economic growth for 2017, MTI said.